business owners policy
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Why You Need
A BUSINESS OWNERS POLICY (BOP)
COMPREHENSIVE BUSINESS COVERAGE:
A Business Owners Policy (BOP) typically combines Commercial Property Insurance and General Liability Insurance into one package, which is convenient and cost-effective for business owners.
MORTGAGE REQUIREMENT:
Although a BOP is not required by Michigan law, if you own your business property and have a mortgage, your lender typically requires you to have Commercial Property Insurance which is included in the BOP.
LIABILITY PROTECTION:
Protect your business from liability for injuries, property damage, and legal claims where you are found at fault.
BUSINESS INTERRUPTION:
BOPs often include coverage for lost income and extra expenses incurred if your business operations are interrupted due to a covered event, such as fire.
There are Two Standard Coverages Combined in a Business Owners Policy (BOP) Package:
Commercial Property Insurance:
Protects your business’s physical assets, including owned or leased buildings, equipment, inventory, and furniture, against covered risks such as fire, theft, vandalism, and certain weather events.
Example: A bakery covered under a BOP that experiences a fire, resulting in damage to its commercial oven, refrigerators, and baking equipment. Commercial Property Insurance would assist in covering the expenses of repairing or replacing the damaged items.
General Liability Insurance:
Provides financial protection if your business is found legally responsible for bodily injury or property damage to others that occurred either on your business premises or due to your business operations. General Liability covers medical expenses incurred by individuals who are injured on your business premises or because of your business operations, covering costs such as hospital stays, doctor’s visits, surgeries, rehabilitation, and related medical expenses.
Example: A customer slips and falls on a wet floor in your retail store, causing injuries. Your BOP Insurance would cover the customer’s medical expenses and legal fees if they decide to sue your business for negligence.
A BOP can be Customized with Optional Coverages to Suit Specific Business Needs:
Personal Injury Liability:
Personal and advertising injury liability extends coverage to certain non-physical injuries caused by your business operations, including defamation (libel and slander) and copyright infringement.
Defamation (Libel and Slander):
If your business is accused of making defamatory statements about another person or business, resulting in harm to their reputation, personal injury liability coverage under your BOP may provide protection. This includes coverage for both libel (written defamation) and slander (spoken defamation).
If your business is sued for defamation, this coverage helps cover legal expenses, including attorney fees, court costs, and any settlements or judgments awarded against your business. Personal Injury Liability coverage can also help cover damages awarded to the party claiming defamation, such as compensation for harm to their reputation, emotional distress, and lost business opportunities.
Example: A competitor alleges that your marketing materials contain false statements about their products, damaging their reputation in the marketplace. Personal Injury Liability coverage will help cover legal expenses if the competitor sues your business for libel. If the court awards damages to the competitor, your coverage would help pay for those damages, up to the policy limits.
Copyright Infringement:
Personal Injury Liability coverage may also extend to claims of copyright infringement, which occurs when your business uses someone else’s copyrighted material (such as images, text, or music) without permission, resulting in financial losses or damages to the copyright owner.
Example: Your company’s website inadvertently uses images from an online database without the proper licensing or permission. If the copyright owner discovers this unauthorized use and files a lawsuit against your business, Personal Injury Liability coverage could help cover legal costs and potential damages.
Product Liability:
Protects your business against claims related to injuries or property damage caused by products you manufacture, distribute, or sell.
Example: A customer claims to have suffered allergic reactions after using a skincare product sold by your beauty salon. Product Liability Insurance will cover legal costs if the consumer sues your business for damages.
Business Interruption:
Also known as business income insurance, helps replace lost income and cover ongoing expenses if your business is unable to operate due to a covered peril, such as fire.
Example: A restaurant covered under a BOP experiences significant damage from a fire and is forced to close for repairs. Business Interruption Insurance would compensate the restaurant for the lost income during the closure, allowing them to continue paying rent, utilities, and employee wages until they can reopen.
Spoilage Endorsement:
If you own a restaurant, you might want a spoilage endorsement. If a power outage causes your walk-in refrigerator to fail and your inventory is ruined, your BOP would help cover the loss.
Employment Practices Liability Insurance (EPLI):
Offers protection against claims alleging wrongful employment practices such as discrimination, harassment, wrongful termination, or retaliation. EPLI coverage can help cover legal defense costs and settlements or judgments.
Equipment Breakdown:
Covers the costs of repairing or replacing business equipment, machinery, or systems that suffer a breakdown due to mechanical or electrical failure. This endorsement may include coverage for lost income resulting from the equipment failure.
Accounts Receivable Coverage:
Provides reimbursement for the cost to re-establish or recreate accounts receivable records that are lost or damaged due to a covered peril such as fire, theft, or vandalism.
Bailees Coverage:
Extends coverage to property of others that is in the insured’s care, custody, or control. This endorsement is relevant for businesses that handle or store customer property, such as dry cleaners, repair shops, or warehouses.
Potential Savings to Explore:
Insurance discounts can differ depending on the insurance provider you select. It is important to note that not all carriers offer the same discounts.
Flexi-Bundle™ & Save:
Flexi-Bundle™ Discount: Combine up to four insurance products and select from up to four insurance carriers.
Frequently Asked Questions
Please Note:
At Insurish, we provide general information on insurance products to help you grasp their different aspects. It’s important to note that this information isn’t an insurance policy and doesn’t pertain to any specific carrier’s policy. It doesn’t alter any provisions, limitations, or exclusions expressly stated in an insurance policy. Descriptions of coverages, discounts, and features are concise. For a comprehensive understanding of specific policy details, we recommend reading the applicable policy and consulting an Insurish agent. Coverages and features vary by insurer and state and may not be available in all states. Coverage for accidents or losses depends on the terms and conditions of the actual insurance policy. References to premiums, losses, deductibles, and costs are illustrative and may not apply to your circumstances. Insurish is not liable for the content of third-party sites linked from this page.